Internet “Bad Boy” Michael Robertson on the Future of Phones

Michael Robertson hopes to do for internet voice protocol SIP what he did for MP3: Make it so useful, cheap and ubiquitous that it becomes a threat to an entrenched and soporific industry. MP3 took on the recording industry. Now his SIPPhone, the closest thing to plug-and-play IP-to-IP voice connectivity today, is poised to battle the telephone giants. SIPPhone's sheer simplicity, Robertson believes, will help propel VoIP to new heights. In this interview with Voxilla, Robertson talks about SIPPhone's plans, the future of telecommunications, and why the boys from Skype have got it wrong.

It says a lot about the future of internet telephony that two of the most successful "bad boys" of the internet – Kazaa's Niklas Zenstrom and MP3.com's Michael Robertson – have turned their attention to promoting the growth of Voice over IP.

Both Zenstrom and Robertson incurred the ire of the music industry and the Recording Institute Association of America because the technologies they helped establish made it much easier to download copyrighted music over the net. Robertson came first by helping to make the MP3 compression format the ubiquitous standard for audio on the net. Zenstrom followed by releasing Kazaa, which quickly became the most popular P2P program used by music "sharers" around the world.

Now the pair are slashing away at a whole different breed of industry titan: the giant telephone companies. But, though they share a common adversary, they have chosen to fight their new battles in entirely different ways.

Zenstrom is hoping to bring the telephone giants to their knees with Skype, an IP-to-IP VoIP software program that currently works only in Microsoft Windows and utilizes a proprietary protocol to establish voice connections between its users. Banking on the popularity of Kazaa, Zenstrom says more than 1.2 million users worldwide have downloaded Skype.

Robertson, on the other hand, has chosen a totally different route. His SIPPhone.com provides users with two telephones for less than $130. The SIPPhones, manufactured by Grandstream, connect to an Ethernet port and utilize the SIP protocol, which is quickly becoming the de facto standard for IP-to-IP voice communications.

Robertson is hoping that SIP becomes as widespread as MP3, and believes SIPPhone will help carry it a large portion of the way there.

In a way, Robertson is trying to do with SIP what he did for MP3 and later with Linux with his still-kicking Lindows operating system: Take a technology that works well but is understood only by the geekiest of computer users, simplify it to its most basic form, and market it to typical consumers directly.

Robertson still does not know how his new company will ever make a profit. His goal is to make it available to millions of users and go from there. Having sold MP3.com to Vivendi for more than $370 million in 2001, he can probably take his time to get there.

We caught up with Robertson during VON 2003 in Boston last month. Here's our conversation:

Voxilla: The SIPPhone has been out for nearly two months. So who's signing up?

Michael Robertson: I would say that probably the number 1 feedback we get is that it's from international users. They'll get two phones, they'll try them out and then they'll email us with 'Hey, I'm ordering two more because I have a friend, or a co-worker, or an office in, fill in the foreign country here, India, China, Mexico. That's one of the key uses we're seeing initially.

V: Do you see international use as the major driving force behind VoIP growth?

MR: Yes. That's where people pay huge phone rates. They want to avoid those huge phone bills. That's where the phone bills get the biggest because you have private and government monopolies that own a lot of these companies. So it makes economic sense.

V: SIPPhone has announced an interconnectivity agreement with Packet8. Are you interested in doing the same with others, such as Vonage?

MR: Absolutely. We haven't talked to Vonage. We're committed to roll out first with Packet8. But we'd love to connect with everybody.

V: Who else are you interconnected with?

MR: IPTel.org, an FWD type of service online. We've had a couple of people in foreign countries that have little phone companies using SIP technology, a-la-Packet8, that I think you could look at us to announce connectivity with soon.

V: What's it going to take to get all SIP phones connected without any reliance on PSTN?

MR: It's pretty simple. There has to be some free software, and there are some free software programs already out there today. Then you need cheap hardware. We're hopefully leading that with the $65 phone. We're excited about pushing that price down to the sub-$50 point very soon, and even lower.

V: What do you think of Skype?

MR: Skype is nice technology, I imagine. But the difference is that SIP is an international standard, where you have hardware, you have software, you have services, and you have a global movement. It will run over every other voice technology out there, without a doubt; just like MP3 did. You had Microsoft pushing Windows media, Real pushing Real Audio and Liquid Networks pushing Liquid Audio and all those guys got run over by MP3. It wasn't because there was one company that did MP3. It was because there was an international open standard that the whole world was working on. That's what you have with SIP. So Skype is a nice little experiment but it will get quickly run over by SIP.

V: But Skype has surpassed a million downloads already . . .

MR: So what? Downloads means nothing. What matters are actual users that are using it to make actual calls. That's a totally different number. At every step — start the download, finish the download, install it after I finish the download, run it after I finish the download — you lose 50 percent each time.

V: Does it make sense for SIPPhone to interconnect with Skype?

MR: No, no. They need to be SIP-based. SIP is going to overrun them. They should support SIP. SIP should not support Skype. When I started MP3, Real Audio was the king. Everybody used Real Audio and people said 'Dude, Real Audio has all the downloads….millions of downloads, and all these users and content.' And guess what? MP3 kicked its ass. And it's going to be the same with SIP. SIP is going to outrun, overrun all these proprietary formats because it has a global initiative. It will have one company, SIPPhone, working on it. But it will have everyone else working on it too.

V: Your vision is to combine email, messaging and the phone into a single platform. Can you explain that?

MR: I have a SIPPhone in my office and I, probably stupidly, printed my actual office number in the "Quick Start" guide we send out with the phone. When people plug in their phone they see this number to call and they say: "Hey, I'll call Michael." So I would love to see, from my computer, who's on the phone. I want to see that it's so-and-so who lives in such-and-such country. I would love my instant messenger to pop up and for me to be able to say: 'I'm in a meeting right now, send that guy to voice mail.' I'm not going to be able to do that from the phone handset. I need to be able to do that from some interactive, instant messaging type program. It would be great if I could see someone's name, click 'voice mail' and it would send the message on to voice mail.

I was just travelling in Taiwan. I'd love to be able to plug in my laptop, download my email, download all my voicemail, then be able to go through all of them on a plane. It's a very simple thing to do and you're going to see it soon. You're going to see a lot of things where there are intersections between the phone, instant messaging and email.

V: So you gave out your direct line. What do users ask when they dial you?

MR: There's usually a big pause when I go 'This is Michael.' Then they usually say 'Hello … is this … Mr. … Robertson? I just got a phone here. It worked. I can't believe it.' Then they ask me where I'm at and I'm in San Diego. They they tell me where they're at.

V: Are they asking for any specific features?

MR: They want to go cordless. They don't want to be tethered. And we're working on that. We'll have a cheap adaptor that we'll sell that will allow you to go to Walmart, buy a cordless phone, plug it in and use that as your SIPPPhone. That'll be before the end of the year at about the same price point. So they want cordless. They want conferencing. They want to be able to conference two or three, primarily offices. That's another big feature request that we get.

V: Are people asking for voice mail?

MR: No, we haven't heard that.

V: About 50 percent of your market is outside the US. What's the biggest market abroad?

MR: Number one? Japan. We're big in Scandinavia, Denmark, Sweden and Norway. That's pretty impressive that 50 percent of our users are outside the U.S. The web site is only in English, I've never traveled outside the United States to promote the SIPPhone. We're very U.S.-centric and to have 50 percent international use tells you a lot.